After a wet July that more than made up for its delayed onset in June, the southwest monsoon has entered an extended dry phase. The current month has so far seen the country receive nearly 31 per cent below-normal (long period average) rainfall, converting a cumulative seasonal surplus of 4.2 per cent during June-July into a 7.1 per cent deficit as on August 25. Much of this deficient/sub-par rain has been concentrated in eastern, southern and central India.
Karnataka has already initiated an exercise for assessment of crop conditions as a precursor to declaring drought, even as pressure is mounting on the ruling alliance in Maharashtra to follow suit. Overall sowing of kharif crops, barring pulses, has been satisfactory and higher than last year, thanks to the monsoon’s good run from the last week of June through July. But the dry August — and not much of a revival being forecast for the next one week — raises concerns over the crop now in vegetative growth stage.
The real worry, however, may not be with the kharif crop — which farmers may be able to salvage with one more shower or even the available moisture. Instead, it would be with the wheat, mustard, onion, potato and other crops to be planted in the upcoming rabi season. The Central Water Commission’s latest data on water in 146 major reservoirs show these at 78.6 per cent of last year’s and 93.9 per cent of the 10-year-average levels for this time.
With El Niño’s effects beginning to show, there could be pressure on both irrigation reservoirs and groundwater resources that sustain the cultivation of winter-spring crops. That may, in turn, make the current food inflation not just transitory and largely limited to vegetables, but persistent and broad-based. Generalised food inflation is something neither the government in a year leading to national elections nor the Reserve Bank of India can afford to look through.
That being the case, supply-side actions are the only way forward. The Narendra Modi government has, of course, not been found lacking there. It has deployed every tool from the old textbook — be it curbing/banning wheat, non-basmati white rice, sugar and onion exports or imposing stocking limits on major pulses — and one can expect more in the coming days. There are dangers with this sledgehammer approach. As this newspaper has repeatedly pointed out, they can cause long-term damage to India’s image as a reliable global supplier, while undermining the government’s own past reformist record. Building markets takes time and effort, while the undoing can come with the stroke of a pen. Supply-side management should rely primarily on liberalising imports. The government should clearly convey that the trade curbs it has imposed will be lifted at the earliest.
